Tata Coffee is headed higher: CK Narayan, Sharyans Resources

CK Narayan, President Treasury, Sharyans Resources, in a chat with ET Now talks about Tata Coffee.

What is your view on Tata Coffee on the charts?

With a tag like Starbucks, it becomes a little bit of a lifestyle stock. In any case, the consumption of coffee in India has been going up and the concept of things like CCD and Mocha and Barista have slightly romanticised the concept of coffee. So maybe putting all those together, Tata Coffee would certainly be a beneficiary.

It is not a cheap stock. It is traded up as circuits. Fundamentally, it is at about 25 times its trailing earnings. It's about 800-900 crore market cap company. But on the charts, we have seen sharp drop about 8-10 sessions ago and reportedly, this was on some single players' large position being exited. So that dropped the stock and slammed into the lower support - somewhere around 425 down to about 390. 425 to 390 is a real support zone for the stock.

But seeing where it is today, that is fair distance away. So let’s concentrate on the upside right now. 660 is what it had hit on the higher side and at the current price, it is all set to overcome the near term set of resistances. So with the news, with the renewed momentum, with the volume already present in the stock overtime and with fairly decent set of numbers, the share is clearly headed higher. I would look for a price level of about 730 over the medium term.